Essentials of Economic Theory: As Applied to Modern Problems of Industry and Public PolicyClark, John Bates
General
Essentials of Economic Theory: As Applied to Modern Problems of Industry and Public Policy
Clark, John Bates
Economics
If the line _BC_ represents the productive power of a unit of labor in
a region which is sparsely peopled, and the line _B'C'_ represents the
productive power of a unit of labor in a densely peopled region, we
may assume that _AC_ and _A'C'_, which are equal to each other,
represent the product of a unit in either locality when, general
progress being precluded, the difference in the density of population
should have been leveled out. Move people at once and in a wholesale
manner till there is nothing to be gained by further moving them,--let
pressure of population on the land be fully equalized,--and you may be
supposed to create a condition of uniform productive power for
laborers of a given grade in the entire region. The horizontal line
_AA'_, which is everywhere the same distance above the line _CC'_,
represents the universal level of the productivity of labor in such a
theoretical condition. The line _BB'_ represents the actual and
different levels of the natural earnings of labor in the different
regions. Assuming that all other static adjustments are made, but that
the equalization of population has not taken place, labor will earn
the amount _BC_ in one place and the amount _B'C'_ in another.
Somewhere it will earn an amount represented by the vertical line
descending from _D_ and somewhere that expressed by the line
descending from _F_, while there will be places where the earnings of
labor are measured by the line descending from _E_, which is the
amount that labor would everywhere create and get if the population
could be quickly made normal in all regions. The standard of wages for
the whole of the great region, largely European and American, which
constitutes the economic center of the world, shows varying levels in
different countries and parts of countries, and the actual rates in
every place fluctuate about this proximately normal standard for that
place, the standard rate in one locality being higher than that of
another.
The line _A'B'_ exceeds in length the line _AB_, and this expresses
the fact that equalizing the pressure of population on the land in
different regions adds more to the productivity of labor in the region
now crowded than it deducts from that of labor in regions now sparsely
peopled. The overcrowding does greater and greater harm the further it
is carried, and therefore taking away a surplus of people from a
region which has suffered greatly from overcrowding affords a relief
which more than offsets what is lost in other places by a moderate
increase of population. Moreover, the fact has to be recognized that
at present there are ten square miles of sparse population for one
that is very densely peopled, and reducing all to an equality would
add only slightly to the number of inhabitants of the regions that now
contain few of them.[1]
Public-domain text, read in full here on John Shaqi.
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